According to a report by the Natural Resources Defence Council, 39% of the carbon dioxide emitted into the atmosphere from all sources in the United States in 2004 originated from the top 100 US electric power producers. Given that figure and all the recent media attention on climate change, one would think that US electric utility companies would be taking serious proactive steps to reduce their CO2 emissions. Unfortunately, the reality is quite different.

According to a March 22, 2007 article in the Christian Science Monitor, Global Boom in Coal Power and Emissions“, 37 countries plan to add new coal-fired capacity over the next 5 years. This is worrisome since burning coal generates 6% more CO2 per kilowatt-hour than burning petroleum and 52% more CO2 than natural gas (from the US Energy Information Agency). On a worldwide basis, the shift to more coal-fired power plants will result in an additional 1.2 billion tons of CO2 missions per year by 2011. The United States will have the largest increase in CO2 emissions from new coal-fired electric power plants on both a percentage and an absolute tonnage basis where nearly 38,000 megawatts of new coal-fired capacity is slated to come online resulting in an additional 230 million tons of CO2 emissions per year. Worldwide, by 2012, there will be approximately 7500 coal-fired power plants emitting 9 billion tons of CO2 annually, compared to 31 billion tons from all sources.

The central driver behind more coal-fired power generation is coal’s lower price per kilowatt and greater price stability over natural gas and petroleum fuel. Plus coal is abundantly available and poses fewer national security issues. According to a recent report from the Massachusetts Institute of Technology titled The Future of Coal, the increased use of coal for electric power generation will exacerbate climate change unless carbon capture and sequestration (CCS) is deployed on a broad scale. CCS is a means of capturing the carbon dioxide produced from burning fossil fuel and preventing it from escaping into the atmosphere, primarily by pumping it into rock layers underground or under the seabed. But the technology is still in development and has not been tested on a commercial scale. The MIT study also estimates that commercial-scale CCS-equipped plants would generate 20% less electricity and cost 40% more. Over the next 5 years, it is unlikely that CCS will play a significant role in CO2 abatement, particularly in developing countries like China and India. In a presentation to the National Press Club on Feb 26, 2007, James Hansen, Director of NASA’s Goddard Institute for Space Studies, called for a moratorium on the construction of new coal-fired power plants until CCS is available.

A recent study published in the McKinsey Quarterly plots a cost curve for CO2 abatement approaches across 3 time periods (now – 2010, 2010 – 2020 and 2020 – 2030), 6 sectors (power generation, manufacturing industry, transportation, residential and commercial buildings, forestry, and agriculture and waste disposal), and 6 regions (North America, Western Europe, Eastern Europe — including Russia, other developed countries, China, and other developing nations). The study focuses on abatement measures that are estimated to cost €40 per tonne or less in 2030. The McKinsey study was used to provide data for a Climate Change Map proposed by Vattenfall, one of Europe’s largest electric utilities and also one of its largest industrial emitters of greenhouse gases. The findings of the Vattenfall study identify abatement potential of 27 gigatons of CO2-equivalent per year by 2030 with a maximum cost of €40 per tonne CO2. That target is roughly equivalent to the 26 gigatons per year required to prevent atmospheric greenhouse gas concentrations from exceeding 450 parts per million, in the mid-range between the 400 to 550 ppm range scientists estimate are needed to prevent the average global temperature from rising more than 2 degrees Celsius.

The conclusion of the Vattenfall study includes a variety of requirements to meet the abatement targets across sectors and regions. In the power and industrial sectors, it will be essential to use regulatory mechanisms to create financial incentives to invest in low emissions technology (e.g. setting a stable price for emitted CO2 as is done in the EU cap and trade system). To maintain a level playing field and avoid competitive distortions, agreement and cooperation across geographical regions will be necessary. In the building sector, demand side management through increased efficiency measures such as insulation and efficient lighting have a net negative abatement cost since such measures pay for themselves in reduced energy costs. But due to its dispersed nature and the perception of high retrofit cost, enforcement of efficiency standards will be necessary to achieve the full abatement potential in the building sector.

There are some very challenging political and institutional challenges to overcome but the overall conclusion of the McKinsey/Vattenfall study is that it is feasible to achieve the 27 gigaton abatement target with mutual understanding, concerted actions and global cooperation. Most importantly, we must start now. One way to help bring about change is by applying pressure to corporations that are profiting from destructive practices. One particularly noteworthy campaign is being mounted by the Rainforest Action Network (RAN). On their Dirty Money site, RAN lists the names of several large US and Canadian banks that have substantial involvement with the coal or coal-fired power industry (the site provides some suggestions on how customers and shareholders of these banks can make a difference).

Within the electric power industry, there is a growing consensus for the need for regulating greenhouse gas (GHG) emissions. Of the 10 largest electric power generation companies, 5 of them now support mandatory caps on greenhouse gas emissions. These companies need to plan for the replacement for aging facilities and, since they see a CO2 cap and trade program as very likely, they are seeking CO2 pricing guidelines to inform their decision-making. As of February 16, there were 5 climate change bills in congress. A recent report prepared by senior fellows at the non-profit Resources for the Future summarizes the 5 bills and provides a side-by-side comparison.

In his February 26 presentation, James Hansen justifies his speaking out on climate change by what he sees as a “huge gap” between what is known by the scientific community and what is known by those “who need to know”, namely the public and policy makers. Another way you can make a difference is by talking to your friends about climate change and raising the issue of energy efficiency at your place or employment or at school and town gatherings. You can contact your local utilities and ask what energy efficiency programs they know are available for your area. And you can write your state and US representatives and ask what their positions are on energy efficiency and climate change legislation. And of course, replace those old incandescent bulbs with compact florescent lights, turn off (and unplug) your electronic devices when not in use and walk, cycle or take public transportation rather than a car whenever possible.